Deloitte: More flexible client partnerships and faster adoption of digital tools will define the next generation of business process outsourcing companies

Consultancy Deloitte says COVID-19 is a 'wake-up' call for the traditional-minded business process outsourcing (BPO) sector.

• Consultancy Deloitte says COVID-19 is a 'wake-up' call for the traditional-minded business process outsourcing (BPO) sector.
• More flexible client partnerships and faster adoption of digital tools will define the next generation of BPOs.
• Singapore-based BPO service Everise has introduced a number of work-from-home solutions based on its proprietary technology
• A hybrid model of remote working and office could be the future BPO model, but data security is still a big challenge
• Because of his work, Business Insider named CEO and founder of Everise, Sudhir Agarwal, to our annual list of the 10 leaders transforming enterprise tech in Asia.
• Visit Business Insider's Transforming Business homepage for more stories.

Amid the chaos of COVID-19 and the huge impact it has had on the global workforce, there is one business sector for which the pandemic could end up leaving a positive legacy. For the business process outsourcing (BPO) sector, COVID-19 has drawn a clear line in the sand between the old and the new.

"The old 'bums on seats' model, that's absolutely dying," Punit Bhatia, partner, GBS and BPO Advisory at consultancy Deloitte said. "If you are a BPO provider that's still in that business then you're in trouble. But if you are in the transformational BPO business, where you are bringing in innovative tools and technology, and you are adapting to new ways of working, then the future's definitely very bright."

After a tough first half of the year, when BPO suppliers were faced with the huge resourcing challenges brought on by lockdowns and subsequent work-from-home protocols,  the sector is now seeing increased activity and the outlook is strong. But only those who have been willing to adapt to new ways of working will emerge successful. 

According to a recent report from Deloitte, co-authored by Bhatia, the impact of the pandemic has been a "wake-up call" for the BPO industry. 

The report notes the need for the BPO model to become more flexible and responsive, and better prepared to anticipate and respond to unexpected changes to their clients' businesses and markets. At the same time, the long-promised pursuit of digital transformation will need to become a reality to help reduce the reliance on people for critical and high-volume processing. 

What is clear is that operational change for BPO companies is no longer an aspiration;  it's now an essential part of doing business.

Technology enabling remote working

Sudhir Agarwal, founder and CEO of Singapore-based BPO firm Everise, has witnessed the transformational impact of COVID-19 first hand. "The pandemic has been an unexpected catalyst of rapid transformation for all industries - the traditional BPO model included," he said. "Digital fluency, along with business flexibility and agility are required to help organizations respond effectively to the ongoing uncertainty."

When COVID-19 first landed, Agarwal found himself in a fortunate position. Having established his company in 2016 with a vision to disrupt the existing BPO model, Everise's emphasis on tech-powered solutions meant it was able to adapt at pace. This was especially useful when it came to the necessity of allowing people to work from home.

The utilization of remote working has been the single-largest impact of COVID-19 on the BPO sector. BPO operations have traditionally been built around huge, single-location campuses, some housing in excess of 20,000 workers. Transitioning these workforces into home environments, while still maintaining business continuity, has been difficult. 

Everise says it was able to move 90% of its global workforce to work from home within two weeks in March. Having implemented WFH solutions as early as 2018, the company was able to retain business continuity and secure new business wins, despite restrictions in many of the 14 global locations in which it operates. 

Agarwal said Everise's ability to capture demand and leverage its technologies has powered a 28% revenue growth in 2020. "Everise launched its Home Experience solution as a pilot in 2018 as a response to record unemployment in the US," he said. "We took our experience and grew the solution into a global Remote CX Playbook that has become an invaluable differentiator for Everise in the wake of cataclysmic change caused by the pandemic."

Data protection is a challenge for remote working

But while remote working has helped some in the BPO sector flourish, it has also raised challenges, in particular around data security. 

"Data security strategies for BPO suppliers need a big makeover, as remote workers are a potential threat for data breaches, which could hinder market growth," Agarwal said. "According to a Cisco study, 6% of employees admitted to transferring files from a work to personal computer when working from home, which could potentially create significant loss and put the company's data at risk. As we navigate our way through this pandemic, cyber and data security are among the biggest issues to address."

Companies have had to rethink standards and processes around security and protection that are applicable within a single-site workplace, but are much more challenging to implement for remote working. Finding a way to mitigate these cybersecurity and data privacy risks for a more dispersed workforce will be key to gaining client trust.

Again, technological solutions will be key, with the use of AI and fraud detection technologies already being implemented to supervise and monitor remote workers.

"It is evident now that if BPO providers move to a remote-work business model, they will be subject to harsh data security requirements," Agarwal said. "BPOs firms are now tasked to ensure that their technological solution has the performance, infrastructure, and endpoint security necessary to comply with, and maintain, a secure and functional work-at-home environment."

Future proofing the BPO supply chain

With BPO companies working to resolve questions around remote working and data security, as well as the related issue of accelerated technological adoption, what is clear is that the dynamic between client and BPO supplier has changed.

At the most basic level, the pandemic has potentially rebooted the kind of services that BPO suppliers have traditionally provided. Although outsourced processes have in the past been primarily focused on back office, transactional work, COVID-19 has given some BPO firms the opportunity to move up the value chain and become involved in much more complex processes that clients may have previously looked to keep in-house.

The experience of remote working from their own teams during the pandemic has shown clients that these tasks can just as easily be performed 20 miles away or even 2000 miles away. At the same time, for those clients whose businesses have struggled during COVD-19, outsourcing more processes is one way to reduce costs. 

Ultimately though, those firms that have been transparent with clients in terms of finding innovative and pragmatic solutions will be the ones to come out on top. 

"The BPO providers that are winning are the ones that are being really flexible and pragmatic, who are having those conversations in a really collaborative way with their clients," Bhatia said. "The ones who have been reactive, have been slow, and where the client who has had to push them rather than them coming up to the client with solutions, those are the ones that are struggling."